Sichuan Aviation Low Cost Operation Analysis

Unpredicable civil aviation market keeps testing airline companies.With the further opening of Internet market and the transparency of airfare,high profit age based on information asymmetry is gone for ever.At the same time,the rapid growth of GDP per capita,the escalation of education level of individuals and the constraints on civil servants trip bring more opportunities to low-cost airline companies.After several years' striving and growth,SiChuan Airlines has stepping into medium-sized airline company.Due to the changes of policies,economic environments and other factors,SiChuan Airlines find it difficult to precisely locate its own market.Meanwhile,other low-cost airline companies further challenge current airline market by their low airfare.Being confronted with all these difficulities,SiChuan Airlines adopt the strategic plan to transform into a low-cost airline.By analysing the operating models of some low-cost cirline companies and current operating condition of SiChuan Airlines,this paper tries to figure out three business models for SiChuan Airlines' transition into low-cost ailine company.In the light of cost leadership strategy,the paper compares the three models and conludes the best modle for SiChuan Airlines: introduce all-economy class aircraft to lower the cost.This paper falls into six parts.The first part is introduction,including background information,the purpose of research and methodology.Then the literature review where five modles and PEST analytical method are introduced and analysed in the second part.The third and fourth parts analyse the operation conditions for SiChuan Airlines to develop low-cost business.In the fifth part,the three business models are introduced and by taking into accounts similar cases and real operating conditions of Sichuan Airlines,the feasiblity analyses are conducted.Conclusion and future expectation for this study are put in the last part.